Confidence in Resource Estimates - Beyond Classification

The classification of Mineral Resource estimates for reporting in accordance with the JORC Code is a statement of the Competent PersonÆs confidence in the estimate and an attempt to convey that confidence to the various users of the resource estimate. In general the classification process is either largely subjective, relying on the Competent PersonÆs experience, or relies on statistical measures derived from the estimation process. These statistical measures may not necessarily relate to the overall confidence in the resource which must also take account of the confidence in the geological inputs to the estimation. Several authors, including Jackson et al (2003) and Dominy, Noppe and Annels (2004), have addressed methods of including consideration of geological data and its reliability into the classification process. Henry and Parker (2005) have discussed a quantitative measure for classification of Measured and Indicated Resources related to mine production parcels. These methods rely on the availability of sufficient information for the application of geostatistics, data evaluation techniques or repeated interpretation of data to provide an indication of confidence. They are suitable for very advanced projects. In 2005, using a modification of the financial audit æcontrol and quality criteriaÆ principles, then widely accepted within Newcrest Mining Limited (Newcrest), the principal author developed a scheme which categorised the classified resources into æcontrolÆ and æqualityÆ (or risk) categories. Control covers all aspects of the data collection, the geological interpretation, the data analysis and the modelling of tonnage and grade; it is also influenced by the documentation of the estimate. The quality criteria are a subjective measure of risk associated with the estimation of the resource and refer to the risk that the tonnage and grade are not realised and the consequences if decisions are made on the basis of these estimates. By evaluating the generally accepted level of risk attributed to these quality ratings by Competent Persons within Newcrest, a graphical representation of the confidence in the resource ounces was prepared for communication of the expected confidence in the resource statement.